Singapore property curbs still needed

SINGAPORE — Singapore said Friday that measures it had implemented to cool down the property market have succeeded but it was "too early" to relax them.

Published: 21/02/2014 at 06:16 PM

Writer: AFP

The remarks by Finance Minister Tharman Shanmugaratnam in parliament came amid concerns by analysts about property prices soaring to unsustainable levels in emerging markets, including those in Asia.

"Our cooling measures have been aimed at moderating the market so as to prevent property prices from getting too far out of line with incomes," Mr Shanmugaratman said as he unveiled the 2014 national budget.

"We are not engineering a hard landing, but neither are we able to eliminate cycles in the property market, with upswing in prices in some years followed by corrections," he said.

"Given the run-up in prices in the last four years, it is too early to start relaxing our measures. The government will continue to monitor the property market and adjust the measures when necessary."

Singapore last year imposed additional measures in a bid to dampen the red-hot property market, including raising stamp duties, which made it costlier for foreigners to buy property.

The government also sharply increased minimum cash down payments for individuals applying for loans for second or subsequent homes.

These were in addition to earlier measures to tame the property market, including a move by the central bank in 2012 to impose a maximum tenure of 35 years for new housing loans.

Analysts have raised the red flag about soaring property prices in several Asian economies and have urged regional policymakers to take steps to prevent risky asset bubbles.

Low interest rates have fuelled a property boom in emerging markets which may have led consumers to overborrow.

There are fears that a rise in interest rates expected to accompany a winding down of the economic stimulus package in the United States would lead to borrowers unable to repay their loans.

This could deflate property prices and destabilise the banking system.